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Is Gold a Good Safe Haven During a Market Crash?Gold is widely perceived as the best safe haven for your capital as the stock market goes through a bear market correction or crash. But is this really true? For gold to be a good hedge it would need to move in the opposite direction (have a negative correlation) to the broad market index, in this case, the S&P500. Looking back 15 years we can see this is not the case for Gold (GLD) versus the market. 2005 to 2007 Gold out-performs the S&P500 with 52% gains compared to 25% for the S&P500 2007 to 2009 During the Financial Crisis, Gold provided a good safe haven for 7 months until it lost all of its gains. 2009 to Present The S&P 500 goes on a staggering bull run making 481% to January 2020 Gold makes 138% from 2009 to 2012 moving in correlation with the market, then suffers a serious crash wiping out 42% of its value. The crash and stagnation lasts 8 years. Gold is still 13% lower than its previous all-time high. My Observation 1. Gold might provide a very temporary solution as a safe haven during the early part of a stock market correction. 2. During the Credit Crisis, Gold should have been a perfect store of value because as it seemed the Fiat Currency system was failing gold would have been a great replacement currency along with silver. But that did not work out. 3. Gold is only a safe haven is people think it is. 4. Since the 2009 market bottom, Gold has increased by 65% and the SP500 232% Would I use Gold as a safe haven? Personally no. Not based on this evidence. But in the short-term it may provide relief until people stop believing. What is a good alternative? Holding cash and dollar-cost averaging into the market again as we near the bottom. If you like this analysis, please like and follow so you dont miss future updates. Thanks for reading, Barry
AMEX:GLD
by liberatedstocktrader
10
SHORT GLD / LONG BTCThe definition for safe haven says: It is a financial instrument that retains or even increments its value during periods of financial turmoil. Certain characteristics that a safe-haven assets have: liquidity, limited supply, and functionality. In the last years, I have heard many debates between gold and bitcoin followers. Let's see the charts: GLD reached its peak in September 2011, and it has lost 46.13% of its value in December 15'(approximately 1560 days). On the other hand, BTCUSD reached its peak in December 17'. It has lost 84.27% of its value in December 18' (approximately 364 days). It is too early to call BTC a safe-haven asset. Its very volatile, and it loses its value faster and in big proportions than GLD. The last example was of this was reflected during the last weeks when the vireus had outbreaks in Italy and other parts the world. GLD lost 14.46%, while BTC lost 62.89% of its value. 1. When I analyze the liquidity part of the equation, BTC has an advantage. Bitcoin's technology (blockchain) makes it easy for people to transfer money around the world. It can be easily converted in U.S dollars, Japanese yen, Peruvian Sol, etc. Diversely, gold could be very tedious to convert into cash. 2. One of the main characteristics of a safe-haven is its limited supply. Both GLD and BTC meet that requirement. 3. The last characteristic is its functionality. Safe-haven assets must have a use that will maintain long-term demand. I personally think BTC has an advantage on this one. The GLD charts shows a broken uptrend channel. Price has re-tested support level. This may suggest GLD may see new lows in the coming days/weeks. On the other hand, BTC price action has formed a symmetric triangle. Price has touched an important monthly demand zone. The more times a zone is touched, the more important it becomes. LONG BTC SHORT GLD We will see!
AMEX:GLD
by Andresa30
GLD Is This Wave 4?The dramatic selloff in precious metals this week marks the end of a possible wave 3 of an impulsive wave. Silver looks much worse but thus far is holding above a supposed Wave 1. The alternative view, held by many, is that the recent rallies in PMs was a B wave in a corrective phase and much lower gold and silver prices are to come. WIll be watching silver closely for clues. Stochastics are falling for both metals especially on the weekly and monthly views. Things do not look good. There is nowhere to hide in this upcoming wealth destruction phase. Not shorting the market but squirreling up cash for signs of a bottom in both metals. With gold silver ratio breaking to 104 today. Silver has to be the most unloved asset ever.
AMEX:GLD
by Glewis54
2
GLD GLD failed sell reversal in play. Did the big boys just sucker a lot of weak hands out of their gold? I think so. The sell signal reversed course in dramatic fashion to take out the gap down and is now holding above the gap. That i refer to as a signal failure which means bet 2x in the other direction. Of course as always set your stops as we are in uncharted territory here on many levels. Gold could go to the moon here... or crash... there is no way to tell. One thing for sure, there is opportunity for huge profits here and huge losses if you dont play this right. Ive added a level above which i will buy more when above.
AMEX:GLDLong
by SilvaBull